A report by Unite The Union

Part of the  “Unite Investigates” series

Unite’s latest report has analysed nearly 17,000 companies in the UK and found that average profit margins have soared by 30% compared to the pre-pandemic period.

This report is the largest post-pandemic study of UK profit margins to date. We have exposed that corporate profiteering isn’t confined to just the largest companies or those in a select few sectors. Profits have spiralled out of control everywhere.

This report is the third in a series of contributions on profiteering. Our aim is simple: to uncover who has really profited from pandemic and the inflationary pressures that have followed.

Key Findings

• Average profit margins have increased by 30% across our sample of nearly 17,000 companies.
• In total, the companies we analysed made £156 billion more profit over 2021 and 2022 than if margins had stayed at 2018 levels. That’s equivalent to £5,500 extra spent by every UK household.
• The FTSE 350 companies are paying 20% more to their shareholders, through share buybacks and dividends, post-pandemic than they were pre-pandemic.
• Net investment by FTSE 350 companies also fell from £37 billion per half year in 2018 and 2019, to £9 billion between 2022 and 2023.

Full report available below: view or download the largest post-pandemic study of profiteering in the UK :

https://www.unitetheunion.org/what-we-do/unite-investigates/profit-margins-up-30-across-the-board

FOREWORD BY SHARON GRAHAM: WE NEED TO TAKE

BACK POWER FROM THE PROFITEERS

Many politicians wish we’d stop talking about the cost of living crisis.

Inflation is finally falling, they say. Yes, our energy and food bills jumped

through the roof for a couple of years, but now the markets have adjusted

themselves, the economy has stabilised. It’s all back to normal.

Except, as households up and down the country know, in this new normal

we’re worse off than ever. Inflation may have come down, but bill hikes

and price rises are baked in. We’ve gone through the biggest fall in real

wages, the biggest cut to living standards, in generations. The markets

may have stabilised, but our industries and public services are visibly in

tatters.

We see it all around us. The economy is broken. The model has failed.

Workers and communities are hit with crisis after crisis, then each time

the dust settles the “new normal” leaves us worse off than before.

But some do very well from a crisis. What’s happened in the last three

years is, underneath it all, a major redistribution of wealth away from

workers’ wages to corporate profits.

We’ve analysed the accounts of almost 17,000 companies – the largest

assessment of profiteering in the UK since the pandemic – and the results

are conclusive. Corporate profit margins have increased by a massive

30% since 2018/19. Note that’s margins, not just nominal profits in

money terms, so that jump isn’t affected by inflation.

Our research also shows how increased profits haven’t gone into

investment for future production and jobs – the UK lingers on the lowest

investment rates of all advanced countries. Instead, they’ve been drained

out into payments for investors. Shareholder payouts for the big FTSE

350 companies have jumped up 20% since the pandemic.

And this is why our economy is broken. Because of the choices of

executives, investors, and politicians who choose short-term profits and

fat dividends over investing to rebuild our industries and public goods.

Their choices are tearing apart the fabric of our economic and social

commonwealth.

Profiteers get away with it because they have the power. Over four

decades of free market economics, as we’ve sold off the family silver and

stripped away all controls on the grasping hand of the market, wealth and

power have become ever more concentrated in the hands of a tiny

minority.

There is only one real check on their power. Our power, the power of the

organised working class. This is why at Unite we have one clear aim, to

rebuild the trade union movement. To rebuild the power to claim our

share. That means restoring collective bargaining, that means organising

across our industries and communities, that means restoring pride and

strength in the collective. And then we can insist that other choices are

taken.

In solidarity,

Sharon Graham